Isuzu Motors acquires General Motors East Africa with eye on regional expansion
Isuzu Motors and General Motors Co. have reached an agreement that Isuzu will invest in General Motors East Africa, GMEA. Isuzu is making this investment with the intention of expanding its commercial vehicle production and sales in Eastern Africa.
Since its establishment in 1975, GMEA has been engaged in assembly and sales of Isuzu-badged light and mid-duty trucks and buses, and import and sales of Isuzu pickup trucks and Chevrolet passenger cars. GMEA has maintained the top share in Kenya's commercial vehicle market for five years since 2012.
Isuzu will acquire 57.7% of the GM-owned GMEA stocks to become a subsidiary of Isuzu Motors. As the result, GMEA's company name will be renewed in April, 2017. The new name will be "ISUZU EAST AFRICA".
Isuzu will make this investment aiming at further quality improvement, vehicle sales expansion and aftersales service enhancement. For these purposes, Isuzu will provide the company in East Africa with as much assistance as possible in the fields of personnel training, manufacturing technique and enhancement of Aftersales business.
General Motors President and Managing Director of Africa and Middle-East Operations Mario Spangenberg said the decision was informed by Isuzu’s successful performance in the industry, where it has remained the leader in the past five years.
“95 percent of our sales in Kenya are Isuzu products, so it is only natural to hand over the business,” Spangenberg said adding that only 5 percent of sales made are General Motors products.
Currently, GM enjoys 35.1 percent market share in the country, making it the market leader. General Motors will be re-branded to ‘Isuzu East Africa’ as the Japanese motor maker takes over the management of the company.
Isuzu Motor’s Shinsuke Minami, however, clarified that minimal changes will be done at the company will operations continuing as usual. “Employees do not need to worry about their jobs as they are secure,” Minami said.
Isuzu has also clarified Chevrolet customers need not worry as they will continue to receive after sales and service support. GM East Africa Managing Director Rita Kavashe – who will retain her Managing Director position of the newly branded company – said that the buyout is subject to the approval of the Competition Authority of Kenya and COMESA due in a month’s time.
The two companies first joined hands in 1976 and have been in a long-standing partnership spanning over 40 years in the country. To date, the company has assembled over 80,000 units.
